Life presents everyone with an unending string of problems to be solved. Some call problems opportunities. If people are mature enough to not delude themselves, it doesn’t matter what they call them. Let’s call them puzzles. Entrepreneurship is about solving puzzles.
I know two people close to me who can solve Rubik’s cube in under 1 to 2 minutes. I’m sure there’s tons of people who know how to do this. My brother is one of them. It was a fun trick during our college days when hanging with friends. I picked up a little book to teach myself how to do this. I could not, after reading it a couple of times with the cube standing by. At the time, I figured the return on time investment was not there for me.
Solving a puzzle in a known way is the same as solving a problem in a known way. Workers solve problems in a known way. Entrepreneurs solve problems in new ways. They can succeed or fail with their solution. Success is obtained only if they create financial profit in the process. Value is created, because customers want the solution more than they want the money needed to pay for it. The market is the judge. Individual people decide what problems are relevant enough to solve, and the price tag they’re willing to pay. They also decide that some problems are ok not to solve, because there’s other problems that take precedence in their value system, and resources (money, time, effort) are limited. By making these non-coerced decisions, they improve their lives. The aggregate of all these individuals, what we call the market, is the ultimate judge.
When entrepreneurs solve problems in new ways and fail, we find out because they incur financial losses. Their innovative solution had a price tag that, even if some bought it, was still high enough that not enough people were willing to make the investment, because the return was not there. The additional value created was not there. In aggregate, the market rejected the solution. You could also make the case that in aggregate, the market also rejected the problem. Your problem is not necessarily my problem, and vice versa. There is not one market, there are thousands and thousands of markets, for thousands and thousands of products and services – and ideas, if you will.
The beauty of this is that you don’t need to force anybody into making any of these decisions, and the best solutions come to the top. Forcing people into purchasing or doing anything is a bad idea, it usually does not work to everyone’s benefit. Forcing decisions hinders personal freedom. I think my personal freedom ends where yours begins, and together with that idea, the idea that wellbeing in society improves the more successful entrepreneurs are created and allowed to operate freely, is also another one to cherish.